GEMLS Bylaws

NAME, PURPOSE, AND OFFICES

Section 1.1. Name. The name of this corporation is GOLDEN EMPIRE MLS, INC. (the “Corporation”). The Corporation is a wholly owned subsidiary of the Bakersfield Association of Realtors®, Incorporated (the “Association”)

Section 1.2. Primary Purpose. The primary purpose of the corporation is to conduct a multiple listing service (“MLS”) business in the greater Bakersfield, California area and such other areas as determined by the Board of Directors of the Corporation (the “Board”). A multiple listing service is a means by which authorized participants make blanket unilateral offers of compensation to other participants (acting as subagents, buyer agents, or in other agency or non-agency capacities defined by law); by which cooperation among participants is enhanced, by which information is accumulated and disseminated to enable authorized participants to prepare appraisals, analyses, and other valuations of real property for bona fide clients and customers; by which participants engaging in real estate appraisal contribute to common databases; and is a facility for the orderly correlation and dissemination of listing information so participants may better serve their clients and the public. Entitlement to compensation is determined by the cooperating broker’s performance as procuring cause of the sale (or lease).

Section 1.3. Participation and Authorized Access. A Participant is any individual who applies and is accepted by the MLS, meets and continues to meet all of the following requirements of either a Broker Participant or an Appraiser Participant as defined below in sections 1.3.1 and 1.3.2.

1.3.1. Broker Participant. A Broker Participant is a Participant who meets all of the following requirements: a. The individual or corporation, for which the individual acts as a broker/officer, holds a valid California real estate broker’s license; b. The individual is a principal, partner, corporate officer, or

branch office manager acting on behalf of a principal; c. The individual or corporation for which the individual acts as a broker/officer offers and/ or accepts compensation in the capacity of a real estate broker;* d. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; e. The individual pays all applicable MLS fees; and f. The individual has completed any required orientation program of no more than eight (8) classroom hours within thirty (30) days after access has been provided. *Note: Mere possession of a broker’s license is not sufficient to qualify for MLS participation. Rather, the requirement that an individual or firm “offers and/or accepts compensation” means that the Participant actively endeavors during the operation of its real estate business to list real property of the type listed on the MLS and/or to accept offers of cooperation and compensation made by listing brokers or agents in the MLS. “Actively” means on a continual and on- going basis during the operation of the Participant’s real estate business. The “actively” requirement is not intended to preclude MLS participation by a Participant or potential Participant that operates a real estate business on a part time, seasonal, or similarly time-limited basis or that has its business interrupted by periods of relative inactivity occasioned by market conditions. Similarly, the requirement is not intended to deny MLS participation to a Participant or potential Participant who has not achieved a minimum number of transactions despite good faith efforts. Nor is it intended to permit an MLS to deny participation based on the level of service provided by the Participant or potential Participant as long as the level of service satisfies state law. The key is that the Participant or potential Participant actively endeavors to make or accept offers of cooperation and compensation with respect to properties of the type that are listed on the MLS in which participation is sought. This requirement does not permit an MLS to deny participation to a Participant or potential Participant that operates a Virtual Office Website (“VOW”) (including a VOW that the Participant uses to refer customers to other Participants) if the Participant or potential Participant actively endeavors to make or accept offers of cooperation and compensation. An MLS may evaluate whether a Participant or potential Participant “actively endeavors during the operation of its real estate business” to “offer and/or accept compensation” only if the MLS has a reasonable basis to believe that the Participant or potential Participant is in fact not doing so. The membership requirement shall be applied on a nondiscriminatory manner to all Participants and potential Participants.

1.3.2. Appraiser Participant. An Appraiser Participant is a Participant who meets all of the following requirements: a. The individual holds a valid California Appraisers certification or license; b. The individual is a principal, partner, corporate officer, or branch office manager acting on behalf of a principal; c. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; d. The individual pays all applicable MLS fees; and e. The individual has completed any required orientation program of no more than eight (8) classroom hours within thirty (30) days after access has been provided.

1.3.3. Subscriber. For purpose of these Bylaws, the term “Subscriber” is any individual who meets the qualifications set forth below and applies and is accepted by the Board as a subscriber in the MLS business: (a) The individual holds either a valid California real estate salesperson’s broker’s license or a valid California real estate appraiser’s certification or license; (b) The individual is employed by or affiliated as an independent contractor with a Participant of the type of business (appraisal or real estate brokerage) that the individual is engaged in; (c) The individual has signed a written agreement to abide by the rules and regulations of the MLS in force at the time and as from time to time amended; (d) The individual pays all applicable MLS fees, fines, and/or other assessments; and

(e) The individual has completed the required MLS orientation program of no more than eight (8) classroom hours within sixty (60) days after access to the MLS has been provided.

1.3.4. Rules and Regulations. The Board shall from time to time establish rules and regulations to govern the conduct of the MLS business by the Corporation, which rules and regulations shall contain provisions mandated by the California Model MLS Rules as published and amended from time to time by the California Association of Realtors® (“CAR”) as well as other rules and regulations not inconsistent therewith. The rules and regulations may be amended from time to time with the approval of the Board; provided, however, that any changes to the rules and regulations which are mandated by CAR shall automatically be incorporated into the rules and regulations and do not require approval of the Board. All rules and regulations of the MLS, other than those mandated by CAR, and any amendments or revisions thereto, are subject to the approval by the Association.

1.3.5. No Restriction of General Purpose. Nothing in Section 1.2 and Subsections 1.23.1 through 1.23.35 shall be construed as limiting or otherwise restricting the general purpose of the Corporation as set forth in its Articles of Incorporation.

Section 1.4. Offices of the Corporation. The Board of Directors of the Corporation (the “Board”) shall fix the location of the principal executive office of the Corporation at any place within or outside the State of California. If the principal executive office is located outside California and the Corporation has one or more business offices in California, the Board shall fix and designate a principal business office in California. The Board may, at any time, establish branch or subordinate offices at any place or places that the Corporation is qualified to do business.

SHAREHOLDERS

Section 2.1. Place and Conduct of Meetings. Meetings of shareholders shall be held at any place within or outside the State of California designated by the Board. In the absence of a designation by the Board, shareholders’ meetings shall be held at the Corporation’s principal executive office. If authorized by the Board (in its sole discretion) and subject to the consent requirement in California Corporations Code § 20(b) and any guidelines and procedures adopted by the Board, shareholders not physically present in person or by proxy at a meeting of shareholders may, by electronic transmission by and to the Corporation or by electronic video screen communication, participate in a meeting of shareholders, be deemed present in person or by proxy, and vote, whether the meeting is to be held at a designated place or in whole or in part by means of electronic transmission by and to the Corporation or by electronic video screen communication. A meeting of shareholders may be conducted, in whole or in part, by electronic transmission by and to the corporation or by electronic video screen communication if: (a) The Corporation implements reasonable measures to provide shareholders (in person or by proxy) a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders; and (b) The Corporation maintains a record of the vote or action and any shareholder votes or other shareholder action is taken at the meeting by means of electronic transmission to the Corporation or electronic video screen communication. Any request by the Corporation to a shareholder under California Corporations Code § 20(b) for consent to conduct a meeting of shareholders by electronic transmission must include a notice that absent consent of the shareholder, the meeting will be held at a physical location.

Section 2.2. Annual Meeting. The annual meeting of shareholders shall be held each year on a date and at a time designated by the Board. The date so designated shall be within five (5) months after the end of the Corporation’s fiscal year, and within fifteen (15) months after the last annual meeting. At each annual meeting, directors shall be elected and any other proper business within the power of the shareholders may be transacted.

Section 2.3. Special Meetings. A special meeting of the shareholders may be called at any time by the Board, by the chairman

of the Board, by the president or vice-president, or by one or more shareholders holding shares that in the aggregate are entitled to cast ten percent (10%) or more of the votes at that meeting. If a special meeting is called by anyone other than the Board, the person or persons calling the meeting shall make a request in writing, delivered personally or sent by registered mail or by telegraphic or other facsimile transmission, to the chairman of the Board or the president, vicepresident, or secretary, specifying the time and date of the meeting (which is not less than thirty-five (35) nor more than sixty (60) days after receipt of the request) and the general nature of the business proposed to be transacted. Within twenty (20) days after receipt, the officer receiving the request shall cause notice to be given to the shareholders entitled to vote, in accordance with Section 2.5, stating that a meeting will be held at the time requested by the person(s) calling the meeting, and stating the general nature of the business proposed to be transacted. If notice is not given within twenty (20) days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph shall be construed as limiting, fixing, or affecting the time when a meeting of shareholders called by action of the Board may be held.

Section 2.4. Notice of Shareholders’ Meetings. All notices of meetings of shareholders shall be sent or otherwise given in accordance with this section.

2.4.1. Time for Notice; Content. All notices of meetings shall be sent or otherwise given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting. Shareholders entitled to notice shall be determined in accordance with Section 2.10. The notice shall specify the place, date, and hour of the meeting, and (i) in case of special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of giving the notice, intends to present for action by the shareholders. If directors are to be elected, the notice shall include the names of all nominees whom the Board intends, at the time of the notice, to present for election. If the meeting is to be held in whole or in part by electronic transmission, the notice shall state the means of electronic transmission by and to the Corporation or electronic video screen communication, if any, by which shareholders may participate in that meeting. The notice shall also state the general nature of any proposed action to be taken at the meeting to approve any of the following matters: (a) A transaction in which a director has a financial interest, within the meaning of section 310 of the California Corporations Code (hereinafter referred as the “Code”); (b) An amendment of the Articles of Incorporation under section 902 of the Code; (c) A reorganization under section 1201 of the Code; (d) A voluntary dissolution under section 1900 of the Code which shall acquire the approval of the Association as the Corporation’s parent; or (e) A distribution in dissolution that requires approval of the Association as the owner of all the outstanding shares under section 2007 of the Code.

2.4.2. Manner of Giving Notice. Notice of any shareholders’ meetings shall be given either personally, by first-class mail, or by telegraphic or other written communication (including telegram, facsimile, or other electronic transmission by the Corporation), charges prepaid, addressed to the share- holder at the physical or electronic address appearing on the Corporation’s books or given by the shareholder to the Corporation for purposes of notice. If no address appears on the Corporation’s books or has been given as specified above, notice shall be either (i) sent by first-class mail addressed to the shareholder at the Corporation’s principal executive office, or (ii) published at least once in a newspaper of general circulation in the county where the Corporation’s principal executive office is located. Notice is deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication.

2.4.3. Returned Notices. If any notice or report mailed to a shareholder at the address appearing on the Corporation’s books is returned marked to indicate that the United States Postal Service is unable to deliver

the document to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if the Corporation holds the document available for the shareholder on written demand at the Corporation’s principal executive office for a period of one (1) year from the date that the notice or report was given to all other shareholders.

2.4.4. Special Rules for Electronic Notices. Notice shall not be given by electronic transmission by the Corporation after either of the following: (1) The corporation is unable to deliver two consecutive notices to the shareholder by that means, or (2) the inability to so deliver such notices to the shareholder becomes known to the secretary, any assistant secretary, the transfer agent, or other person responsible for the giving of the notice.

2.4.5. Affidavit of Notice. An affidavit of the mailing, or other authorized means of transmitting, of any notice of shareholders’ m eeting, report, or other document sent to shareholders, may be executed by the Corporation’s secretary, assistant secretary, or a transfer agent, and shall be filed and maintained in the minute book of the Corporation.

Section 2.5. Quorum. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of the shareholders shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to make less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 2.6. Adjourned Meetings; Notice. Any shareholders’ meeting, annual or special, whether or not a quorum is present, may be adjourned from tim e to tim e by the vote of a majority of the shares represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting, except as provided in Section 2.5. When any meeting of shareholders, either annual or special, is adjourned to another tim e or place, notice of the adjourned meeting need not be given if the tim e and place (or the means of electronic transmission by and to the Corporation or electronic video screen communication, if any, by which shareholders may participate) are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than forty-five (45) days from the date set for the original meeting, in which case the Board shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting, in accordance with Section 2.4. At any adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting.

Section 2.7. Voting. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with Section 2.10, subject to the provisions of sections 702 through 704 of the Code (relating to voting shares held by a fiduciary, in the name of a Corporation, or in joint ownership). The shareholders’ vote may be by voice vote or by ballot, provided, however, that any election for directors must be by ballot if demanded by any shareholder before the voting has begun. On any m atter other than the election of directors, any shareholder may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares that the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder’s approving vote is with respect to all shares that the shareholder is entitled to vote. If a quorum is present (or if a quorum has been present earlier at the meeting but some shareholders have withdrawn), the affirmative vote of a majority of the shares represented and voting, provided such shares voting affirmatively also constitute a majority of the number of shares required for a quorum, shall be the act of the shareholders unless the vote of a greater number or voting by classes is required by law or by the Articles of Incorporation. At a shareholders’ meeting at

which directors are to be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of votes which that shareholder would normally be entitled to cast), unless the candidates’ names have been placed in nomination before commencement of the voting and a shareholder has given notice at the m eeting, before voting has begun, of the shareholder’s intention to cumulate votes. If any shareholder has given such a notice, then all shareholders entitled to vote may cumulate their votes for candidates in nom ination, and may give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which that shareholder’s shares are normally entitled, or distribute the shareholder’s votes on the same principal among any or all of the candidates, as the share- holder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.

Section 2.8. Waiver of Notice or Consent by Absent Shareholders. The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be valid as though they were had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if each person entitled to vote who was not present in person or by proxy, either before or after the meeting, signs a written waiver of notice or a consent to holding the meeting or an approval of the minutes of the meeting. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in section 601(f) of the Code, the waiver of notice or consent is required to state the general nature of the action or proposed action. All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A shareholder’s attendance at a meeting also constitutes a waiver of notice of that meeting, unless the shareholder at the beginning of the meeting objects to the transaction of any business on the ground that the meeting was not lawfully called or convened. In addition, attendance at a meeting does not constitute a waiver of any right to object to consideration of matters required by law to be included in the notice of the meeting which were not so included if that objection is expressly made at the meeting.

Section 2.9. Shareholder Action by Written Consent Without a Meeting. Any action that could be taken at an annual or special m eeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the actions so taken, is signed by the holders of outstanding shares having not less than the minim um number of votes that would be necessary to authorize or take that action at a meeting at which all shares are entitled to vote on that action were present and voted. Directors may be elected by written consent of the shareholders without a meeting only if the written consents of all outstanding shares entitled to vote are obtained, except that vacancies on the Board (other than vacancies created by removal) not filled by the Board may be filled by the written consent of the holders of a majority of the outstanding shares entitled to vote. All consents shall be filed with the secretary of the Corporation and shall be maintained in the corporate records. Any shareholder or other authorized person who has given a written consent may revoke it by a writing received by the secretary of the Corporation before written consents of the number of shares required to authorize a proposed action have been filed with the secretary. Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt notice shall be given of any corporate action approved by shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. As to approvals required by California Corporations Code [section 310 (transactions in which a director has financial interest), section 317 (indemnification of corporate agents), section 1201 (corporate reorganization), or section 2007 (certain distribu- tions on dissolution)], notice of

the approval shall be given at least ten (10) days before the consummation of any action authorized by the approval. Notice shall be given in the m anner specified in Section 2.4.

Section 2.10. Record Date. For purposes of determining the shareholders entitled to receive notice of and vote at a shareholder’s meeting or give written consent to corporate action without a meeting, the Board may fix in advance a record date that is not more than sixty (60) nor less than (10) days before the date of a shareholders’ meeting, or not more than sixty (60) days before any other action. If no record date is fixed: (a) The record date for determining shareholders entitled to receive notice of and vote at a shareholders’ meeting shall be the business day next preceding the day on which notice is given, or if notice is waived as provided in Section 2.8, the business day next preceding the day on which the meeting is held; (b) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, if no prior action has been taken by the Board, shall be the day on which the first written consent is given; and (c) The record date for determining shareholders for any other purpose shall be set forth in Section 8.1 of these Bylaws. A determination of shareholders of record entitled to receive notice of and vote at a shareholders’ meeting shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. However, the Board shall fix a new record date if the adjournm ent is to a date more than forty-five (45) days after the date set for the original meeting. Only shareholders of record on the Corporation’s books at the close of business on the record date shall be entitled to any of the notice and voting rights described in this Article 2 notwithstanding any transfer of shares on the Corporation’s books after the record date, except as otherwise required by law.

Section 2.11. Proxies. Every person entitled to vote for directors or any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the Corporation. A proxy shall be deemed signed if the shareholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder’s attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the Corporation stating that the proxy is revoked, or by attendance at the meeting and voting in person by the person executing the proxy or by a subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the Corporation before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of eleven (11) months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of sections 705(e) and 705(f) of the Code.

Section 2.12. Inspectors of Election. Before any meeting of shareholders, the Board may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors are so appointed, the chairman of the meeting may, and on the request of any shareholder or a shareholder’s proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (1) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any shareholder or a shareholder’s proxy shall, appoint a person to fill that vacancy. These inspectors shall: (a) Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the

existence of a quorum, and the authenticity, validity, and effect of proxies; (b) Receive votes, ballots, or consents; (c) Hear and determine all challenges and questions in any way arising in or in connection with the right to vote; (d) Count and tabulate all votes or consents; (e) Determine when the polls shall close; (e) Determine the result; and (f) Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.

DIRECTORS

Section 3.1. Powers. Subject to the applicable provisions of the Code and any limitations in the Articles of Incorporation and these Bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board. W ithout prejudice to these general powers, and subject to the same limitations, the Board shall have the power to: (a) Select and remove all officers, agents, and employees of the Corporation; prescribe any powers and duties for them that are consistent with law, with the Articles of Incorporation, and with these Bylaws; fix their compen- sation; and require from them security for faithful service; (b) Change the principal executive office or the principal business office in the State of California from one location to another; cause the Corporation to be qualified to do business in any other state, territory, dependency, or country and conduct business within or outside the State of California; and designate any place within or outside the State of California for the holding of any shareholders’ meeting or meetings, including annual meetings; (c) Adopt, make, and use a corporate seal; prescribe the forms of certifi- cates of stock; and alter the form of the seal and certificates; (d) Authorize the issuance of shares of stock of the Corporation on any lawful terms, in consideration of m oney paid, labor done, services actually rendered, debts or securities canceled, or tangible or intangible property actually received; and (e) Borrow money and incur indebtedness on behalf of the Corporation, and cause to be executed and delivered for the Corporation’s purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, and other evidences of debt and securities.

Section 3.2. Number of Directors. The authorized number of directors shall be twelve (12) until changed by duly adopted amendment to the Articles of Incorporation or by amendment to this bylaw adopted by the vote or written consent of a majority of the outstanding shares entitled to vote.

Section 3.3. Qualification of Directors. Directors must be Participants or Subscribers to the Corporation’s MLS business. At least five (5) of the directors shall be Participants. If any duly acting director ceases to be qualified as a director, the office of that director shall be declared vacant and a replacement director shall be appointed as provided in Section 3.6.

3.3.1. Limited Number of Directors from One Firm. The number of directors from any one real estate brokerage firm shall be limited to two (2), whether elected pursuant to Section 3.4 or 3.5. In the event that any director during the term of office becomes employed or affiliated as a broker, owner, or independent contractor with a real estate brokerage firm that already has two persons currently serving as directors of the Corporation, then the three directors from that firm shall meet and determine which of the three shall resign as a director within thirty (30) days of the disqualifying event. In the event that a director elected pursuant to Section 3.4 is the one who resigns, then the Participant which elected said director under Section 3.4 shall designate which of the other two directors shall be the “Large Broker Director” (as defined in Section 3.4). If one of the three directors fails to resign within the thirty day period, then the office of the director who changed firms shall be declared vacant and the replacement director shall be appointed as provided in Section 3.6.

Section 3.4. Election of Three Directors by Large Participants. Each Participant representing one of the three (3) largest real

estate brokerage firms determined on the basis of the number or closed sides of residential sales transactions of properties listed in the Corporation’s MLS business and located in the territorial jurisdiction of the Bakersfield Association of Realtors® for the im mediate preceding calendar year shall have the right to elect one (1) of the directors and to remove such director and appoint a replacement of such director at any tim e. Such a director shall be referred to as a “Large Broker Director” and each person so elected shall be deemed to be a Participant for purposes of determining whether at least five (5) directors are Participants under Section 3.3. W ithin thirty (30) days after the end of each calendar year, the Secretary of the Corporation shall notify each such Participant of the ability to elect a director pursuant to this Section 3.4. Such election shall be in writing signed by the Participant entitled to make the election and delivered to the Secretary of the Corporation. The term of any director elected pursuant to this Section shall be for one (1) year.

3.4.1. Failure to Appoint. If there is a failure to elect any of the three directors to be elected pursuant to this Section 3.4 within thirty (30) days after notice has been given by the Secretary to the Participants of the election rights, then any person previously elected pursuant to this Section 3.4 shall continue to act as a director unless such person is unable to or no longer qualified to act as director, in which case there shall be a vacancy in the office which shall be filled according to Section 3.6 for the remaining term of the director whose office has been vacated, which director may not be removed or replaced during that term pursuant to Section 3.4.

Section 3.5. Election and Term of Office of Other Directors. The other nine (9) directors shall be elected at each annual meeting of the shareholders to hold office for the term set forth below. The normal term for the directors (other than Large Broker Directors) shall be three (3) years; provided, however, that for the initial three years following adoption of these Bylaws, there shall be three (3) directors whose term is two (2) years and three directors whose term is only one (1) year, so that one third of the directors (other than the Large Broker Directors) are elected each year. Notwithstanding the terms set forth above, any term shall not expire until the annual meeting held concurrently with or im mediately after the scheduled expiration of the director’s term. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.

Section 3.6. Removal of Officers and Directors. In the event that an officer or director of the Corporation is deemed to be incapable of fulfilling the duties for which elected, but will not resign from office voluntarily, the officer or director may be removed from office under the following procedure: (a) A petition requiring the removal of an officer or director and signed by not less than one-third of the Participants or a majority of all directors of the Board shall be filed with the president of the Corporation, or if the president is the subject of the petition, with the next- ranking officer, and shall specifically set forth the reasons the individual is deemed to be disqualified from further service. (b) Upon receipt of the petition, and not less than twenty (20) days or more than forty-five (45) days thereafter, a special meeting of the Participants of the MLS shall be held, and the sole business of the meeting shall be to consider the charge against the officer or director, and to render a decision on such petition. (c) The special meeting shall be noticed to all participants at least ten (10) days prior to the meeting, and shall be conducted by the president of the Corporation unless the president’s continued service in office is being considered at the meeting. In such case, the next- ranking officer will conduct the meeting or the hearing by the participants. Provided a quorum is present, a three-fourths vote of Participants present and voting shall be required for removal from office. (d) Any vote taken by the Participants to remove an officer or director must ultimately be confirmed by a majority vote of the directors of the shareholder(s). Notwithstanding the foregoing, the Association may remove an officer

or director by a majority vote of the directors of the Association.

Section 3.7. Vacancies. A vacancy in the Board shall be deemed to exist if (i) a director dies, resigns, or is removed by the shareholders or an appropriate court as provided in sections 303 or 304 of the Code; (ii) the Board declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (iii) the authorized number of directors is increased; (iv) a director ceases to qualify as a director pursuant to Section 3.3; or (v) at any shareholders’ meeting at which one or more directors are elected, the shareholders fail to elect the full authorized number of directors to be voted for at that meeting. Any director may resign effective on giving written notice to the chairman of the Board, the president, the secretary, or the Board, unless the notice specifies a later effective date. If the resignation is effective at a future time, the Board may elect a successor to take office when the resignation becomes effective. Except for a vacancy caused by the removal of a director, vacancies on the Board may be filled by approval of the Board or, if the number of directors then in office is less than a quorum, by (a) the unanimous written consent of the directors then in office, (b) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with section 307 of the Code or (c) a sole remaining director; provided, however, that any such vacancy of a Large Broker Director shall be filled by election of the Participants entitled to elect the director whose office is vacant as provided in Section 3.4 except as otherwise provided in Section 3.4.1. A vacancy on the Board caused by the removal of a director (including a Large Broker Director unless removed by the person or persons entitled to elect such director under Section 3.4), may be filled only by the shareholders, except that a vacancy created when the Board declares the office of a director vacant as provided in clause (ii) of the first paragraph of this section may be filled by the Board. The shareholders may elect a director at any time to fill a vacancy not filled by the Board. The term of office of a director elected to fill a vacancy shall run until the next annual meeting of the shareholders, and such a director shall hold office until a successor is elected or qualified.

Section 3.8. Place of Meetings; Telephone Meetings. Regular meetings of the Board may be held at any place within or outside the State of California as designated from tim e to time by the Board. In absence of a designation, regular meetings shall be held at the principal executive office of the Corporation. Special meetings of the Board shall be held at any place within or outside of the State of California designated in the notice of the meeting, or if the notice does not state a place, or if there is no notice, at the principal executive office of the Corporation. Any meeting, regular or special, may be held by conference telephone, electronic video screen communication, or electronic communication by and to the Corporation. Participation in a meeting through the use of conference telephone or electronic video screen communication will constitute presence in person at the meeting as long as all directors participating in the meeting are able to hear one another. Participation through electronic transmission by or to the Corporation (other than by conference telephone and electronic video screen communication) constitutes presence in person if all directors participating can communicate with the other directors concurrently, and each director is provided the means of participating in all matters before the board, including, without limitation, the capacity to propose, or to interpose an objection to, a specific action to be taken by the corporation.

Section 3.9. Annual Board Meeting. Immediately after each annual shareholders’ meeting, the Board shall hold a regular meeting at the same place, or at any other place that has been designated by the Board, to consider matters of organization, election of offices, and other business as desired. Notice of this meeting shall not be required unless some place other than the place of the annual shareholders’ meeting has been designated.

Section 3.10. Other Regular Meetings. Other regular meetings of the Board shall be held without call at tim es to be fixed by the Board from time to time. Such

regular meetings may be held without notice.

Section 3.11. Special Meetings. Special meetings of the Board may be called for any purpose or purposes at any tim e by the chairm an of the Board, the president, any vice-president, the secretary, or any two (2) directors. Special meetings shall be held on four (4) days notice by mail or forty-eight (48) hours notice delivered personally or by telephone (including a voice messaging system or other system or technology designed to record and communicate messages), telegraph, or electronic transmission by the corporation. Oral notice given personally or by telephone, or written notice given by electronic mail or facsimile, may be transmitted either to the director or to a person at the director’s office who can reasonably be expected to communicate it promptly to the director. Written notice, if used, will be addressed to each director at the address shown on the Corporation’s records. The notice need not specify the purpose of the meeting, nor need it specify the place if the meeting is to be held at the principal executive office of the Corporation.

Section 3.12. Quorum. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 3.13. Every act or decision done or made by a m ajority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, subject to the provisions of California Corporations Code section 310 (as to approval of contracts or transactions in which a director has a direct or indirect m aterial financial interest), section 311 (as to appointment of committees), and section 317(e) (as to indemnification of directors). A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

Section 3.13. Waiver of Notice. Notice of a meeting, although otherwise required, need not be given to any director who (i) either before or after the meeting signs a waiver of notice or a consent to holding the m eeting without being given notice, (ii) signs an approval of the minutes of the meeting, or (iii) attends the meeting without protesting the lack of notice before or at the beginning of the meeting. W aivers of notice or consents need not specify the purpose of the meeting. All waivers, consents, and approvals of the minutes shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 3.14. Adjournment of Meeting. Whether or not a quorum is present, a majority of the directors present may adjourn any m eeting to another time or place. Notice of the tim e and place of resuming a meeting that has been adjourned need not be given unless the adjournm ent is for more than twenty-four (24) hours, in which case notice shall be given, before the tim e set for resuming the adjourned meeting, to the directors who were not present at the time of the adjournment. Notice need not be given in any case to directors who were present at the tim e of adjournment.

Section 3.15. Action Without a Meeting. Any action required or permitted to be taken by the Board may be taken without a m eeting, if all m embers of the Board shall individually or collectively consent in writing to that action. Any action by written consent shall have the same force and effect as a unanim ous vote of the Board. All written consents shall be filed with the minutes of the proceedings of the Board.

Section 3.16. Fees and Compensation of Directors. Directors and members of committees of the Board may be compensated for their services, and shall be reim bursed for expenses, as fixed or determined by resolution of the Board. This section shall not be construed to preclude any director from serving the Corporation in any other capacity, as an officer, agent, employee, or otherwise, and receiving compensation for those services.

ARTICLE 4. COMMITTEES

Section 4.1. Executive and Other Committees of the Board. The Board may, by resolution adopted by a majority of the authorized number of directors, designate an executive committee or one or more other committees, each consisting of two or more directors. The Board may designate one or more directors

as alternate members of any committee, to replace any absent member at a committee meeting. The appointment of committee members or alternate members requires the vote of a majority of the authorized number of directors. A committee may be granted any or all of the powers and authority of the Board, to the extent provided in the resolution of the Board establishing the committee, except with respect to: (a) Approving any action for which the California Corporations Code also requires the approval of the shareholders or of the outstanding shares; (b) Filling vacancies on the Board or any committee of the Board; (c) Fixing directors’ compensation for serving on the Board or a committee of the Board; (d) Adopting, amending, or repealing these Bylaws; (e) Amending or repealing any resolution of the Board which by its express terms is not so amendable or repealable; (f) Making distributions to shareholders, except at a rate or in a periodic amount or within a price range determined by the Board; and (g) Appointing other committees of the Board or their members.

Section 4.2. Meetings and Action of Committees. Meetings and action of committees shall be governed by, and held and taken in accordance with, bylaw provisions applicable to meetings and actions of the Board, with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members except that (i) the time of regular meeting of committees may be determined either by resolution of the Board or by resolution of the committee; (ii) special meetings of committees may also be called by resolution of the Board; and (iii) notice of special meetings of committees shall also be given to all alternative members who shall have the right to attend all meetings of the committee. The Board may adopt rules for the governance of any committee not inconsistent with the provisions of these Bylaws.

OFFICERS

Section 5.1. Officers. The officers of the Corporation shall be a president, a secretary, and a chief financial officer. The Corporation may also have, at the discretion of the Board, a chairman of the Board, one or m ore vice chairman, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be ap- pointed in accordance with the provisions of Section 5.3. Any number of offices may be held by the same person.

Section 5.2. Election of Officers. The officers of the Corporation, except for subordinate officers appointed in accordance with the provisions of Section 5.3, shall be chosen annually by the Board, and shall serve at the pleasure of the Board.

Section 5.3. Subordinate Officers. The Board may appoint, and may empower the president to appoint, other officers as required by the business of the Corporation, whose duties shall be as provided in these Bylaws, or as determined from time to time by the Board or the president.

Section 5.4. Removal and Resignation of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer m ay be removed at any tim e, with or without cause or notice, by the Board. Subordinate officers appointed by persons other than the Board under Section 5.3, may be removed at any tim e, with or without cause or notice, by the Board or by the officer by whom appointed. Officers may be employed for a specified term under a contract of employment if authorized by the Board; provided, however, such officers may be removed from office at any tim e under this section, and shall have no claim against the Corporation or individual officers or Board m embers because of the removal, except any right to monetary compensation to which the officer may be entitled under the contract of employment. Any officer may resign at any tim e by giving written notice to the Corporation. Resignations shall take effect on the date of receipt of the notice, unless a later tim e is specified in the notice. Unless otherwise specified in the notice, acceptance of the resignation is not necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation to monetary damages under any contract of employment to which the officer is a party.

Section 5.5. Vacancies. A vacancy in any office because

of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed by these Bylaws for regular election or appointment to that office.

Section 5.6. Responsibilities and Duties of Officers.

5.6.1. Chairman of the Board. The board of directors may elect a chair, who will preside, if present, at Board meetings and will exercise and perform such other powers and duties as m ay be assigned from tim e to tim e by the Board. If there is no president, the chair of the Board will in addition be the chief executive officer of the corporation, and will have the powers and duties as set forth in Subsection 5.6.3 below.

5.6.2. President. Except to the extent that the bylaws or the Board assign specific powers and duties to the chair of the board (if any), the president will be the corporation’s general manager and chief executive officer and, subject to the control of the Board, will have general supervision, direction, and control over the Corporation’s business and its officers. The managerial powers and duties of the president will include, but are not lim ited to, all the general powers and duties of managem ent usually vested in the office of president of a corporation, and the president will have other powers and duties as prescribed by the Board or the bylaws. The president will preside at all meetings of the shareholders and, in the absence of the chair of the board or if there is no chair of the board, will also preside at meetings of the Board.

5.6.3. Vice President. If desired, one or more vice presidents may be chosen by the Board in accordance with the provisions for electing officers set forth in Section 5.2. In the absence or disability of the president, the president’s duties and responsibilities will be carried out by the highest ranking available vice president if vice presidents are ranked or, if not, by a vice president designated by the Board. W hen so acting, a vice president will have all the powers of and be subject to all the restrictions on the president. Vice presidents of the Corporation will have such other powers and perform such other duties as prescribed from tim e to tim e by the Board. the bylaws, or the president (or chair of the board if there is no president).

5.6.4. Secretary. The secretary will keep, or cause to be kept, minutes of all of the shareholders’ meetings and of all other Board meetings. If the secretary is unable to be present, the secretary or the presiding officer of the meeting will designate another person to take the minutes of the meeting. The secretary will keep, or cause to be kept, at the principal executive office or such other place as designated by the Board, a book of minutes of all meetings and actions of the shareholders, of the Board, and of committees of the Board. The minutes of each meeting will state the tim e and place the meeting was held; whether it was regular or special; if special, how it was called or authorized; the names of directors present at Board or committee meetings; the number of shares present or represented at shareholders’ meetings; an accurate account of the proceedings; and when it was adjourned. The secretary will also keep, or cause to be kept, at the principal executive office or at the office of the transfer agent or registrar, a record or duplicate record of shareholders. This record will show the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of share certificates issued to each shareholder, and the number and date of cancellation of any certificates surrendered for cancellation. The secretary will give notice, or cause notice to be given, of all shareholders’ meetings, Board meetings, and meetings of commit- tees of the board for which notice is required by statute or by the bylaws. If the secretary or other person authorized by the secretary to give notice fails to act, notice of any meeting may be given by any other officer of the Corporation. The secretary will keep the seal of the corporation, if any, in safe custody. The secretary will have such other powers and perform other duties as prescribed by the Board or by the bylaws.

5.6.5. Chief Financial Officer. The chief financial officer will keep, or cause to be kept, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses,

capital, retained earnings, and shares. The books of account will at all reasonable times be open to inspection by any director. The chief financial officer will (1) deposit corporate funds and other valuables in the Corporation’s name and to its credit with depositaries designated by the Board; (2) make disbursements of corporate funds as authorized by the Board; (3) render a statement of the Corporation’s financial condition and an account of all transactions conducted as chief financial officer whenever requested by the president or the Board; and (4) have other powers and perform other duties as prescribed by the board of directors or the bylaws. Unless the Board has elected a separate treasurer, the chief financial officer will be deemed to be the treasurer for purposes of giving any reports or executing any certificates or other documents.

Section 5.7. Compensation. Salaries of officers and other persons employed by the Corporation shall be fixed from tim e to time by the Board or established under employment agreements approved by the Board. No officer shall be prevented from receiving this salary because he or she is also a director of the Corporation.

INDEMNIFICATION AND INSURANCE

Section 6.1. Indemnification of Agents. The Corporation shall, to the maxim um extent permitted by the Code or other applicable law, have power to indemnify each of its agents against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that any such person is or was an agent of the Corporation, and shall have power to advance to each such agent expenses incurred in defending any such proceeding to the maxim um extent permitted by that law. For purposes of this Article 6, an “agent” of the Corporation includes any person who is or was a director, officer, employee, or other agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee, or agent of a corporation which was a predecessor corporation of the Corporation or of another enterprise serving at the request of such predecessor corporation.

Section 6.2. Insurance. The Corporation may purchase and maintain insurance on behalf of any agent of the Corporation insuring against any liability asserted against or incurred by the agent in that capacity or arising out of the agent’s status as such, whether or not the Corporation would have the power to indemnify the agent against that liability under the provisions of Section 6.1.

RECORDS AND REPORTS

Section 7.1. Maintenance of Shareholder Record and Inspection by Shareholders. The Corporation shall keep at its principal executive office or at the office of its transfer agent or registrar, as determined by resolution of the Board, a record of the name and addresses of all shareholders and the number and class of shares held by each shareholder. A shareholder or shareholders holding at least five percent (5%) in the aggregate of the outstanding voting shares of the Corporation have the right to do either or both of the following: (a) Inspect and copy the record of shareholders’ names and addresses and shareholdings during usual business hours, on five (5) days’ prior written demand on the Corporation; or (b) Obtain from the Corporation’s transfer agent, on written demand and tender of the transfer agent’s usual charges for this service, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which a list has been compiled or as of a specified date later than the date of demand. This list shall be made available within five (5) days after (i) the date of demand, or (ii) the specified later date as of which the list is to be compiled. The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust certificate, at any tim e during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or holder of a voting trust certificate. Any inspection and

copying under this Section may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand.

Section 7.2. Maintenance and Inspection of Bylaws. The Corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of these Bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable tim es during office hours. If the principal executive office of the Corporation is outside the State of California and the Corporation has no principal business office in this state, the secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of these Bylaws as amended to date.

Section 7.3. Maintenance and Inspection of Minutes and Accounting Records. The minutes of proceedings of the shareholders, Board, and committees of the Board, and the accounting books and records, shall be kept at the principal executive office of the Corporation, or at such other place or places as designated by the Board. The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection on the written demand of any shareholder or holder of a voting trust certificate at any reasonable tim e during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or holder of a voting trust certificate. The inspection may be m ade in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the Corporation.

Section 7.4. Inspection by Directors. Every director shall have the absolute right at any reasonable tim e to inspect all books, records, and documents of every kind and the physical properties of the Corporation and each of its subsidiary Corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

Section 7.5. Annual Report to Shareholders. Inasmuch as, and for as long as, there are fewer than one hundred (100) shareholders, the requirement of an annual report to shareholders referred to in section 1501 of the Code is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the Board from issuing annual or other periodic reports to the shareholders, as the Board considers appropriate.

Section 7.6. Financial Statements. The Corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the Corporation on file in the Corporation’s principal executive office for twelve (12) months. These documents shall be exhibited to at all reasonable tim es, or copies provided to, any shareholder on demand. If no annual report for the last fiscal year has been sent to shareholders, on written request of any shareholder made more than one hundred twenty (120) days after the close of the fiscal year, the Corporation shall deliver or mail to the shareholder, within thirty (30) days after receipt of the request, a balance sheet as of the end of that fiscal year and an incom e statement of changes in financial position for that fiscal year. A shareholder or shareholders holding five percent (5%) or m ore of the outstanding shares of any class of stock of the Corporation may request in writing an income statement for the most recent three-month, six-month, or ninemonth period (ending more than thirty (30) days before the date of the request) of the current fiscal year, and a balance sheet of the Corporation as of the end of that period. If such documents are not already prepared, the chief financial officer shall cause them to be prepared and shall deliver the documents personally or mail them to the requesting shareholders within thirty (30) days after receipt of the request. A balance sheet, income statement, and statement of changes in financial position for the last fiscal year shall also be included, unless the Corporation has sent the shareholders an annual report for

the last fiscal year. Quarterly income statements and balance sheets referred to in this section shall be accompanied by the report, if any, of independent accountants engaged by the Corporation or the certificate of an authorized corporate officer stating that the financial statem ents were prepared without audit from the Corporation’s books and records.

Section 7.7. Annual Statement of General Information. The Corporation shall file a statement with the Secretary of State on the prescribed form, setting forth the authorized number of directors; the names and complete business or residence addresses of all incumbent directors; the names and complete business or residence addresses of the chief executive officer, the secretary, and the chief financial officer; the street address of the Corporation’s principal executive office or principal business office in this state; a statement of the general type of business constituting the principal business activity of the corporation; and a designation of the agent of the Corporation for the purpose of service of process, all in compliance with California Corporations Code § 1502. Notwithstanding the foregoing provisions, if there has been no change in the information in the Corporation’s last statement on file with the Secretary of State’s office, the Corporation may, in lieu of filing the statement described in paragraph (a) of this section, advise the Secretary of State, on the appropriate form, that no changes in the required information have occurred during the applicable period.

DISSOLUTION

Section 8.1. In the event this Corporation shall at any time terminate its activities, the Board shall consider and adopt a plan of liquidation and dissolution with the approval of the Participants thereof and of the Board of the Association as the Corporation’s sole shareholder. Said plan shall provide for the collection of all assets, the payment of all liabilities, and that the remaining portions thereof be assigned to the parent corporation, namely, the Bakersfield Association of Realtors®, Incorporated.

MISCELLANEOUS PROVISIONS

Section 9.1. Record Date for Purposes other than Notice and Voting. For purposes of determining the shareholders entitled to receive payment of dividends or other distributions or allotment of rights, or entitled to exercise any rights in respect of any other lawful action (other than voting at and receiving notice of shareholders’ meetings and giving written consent of the shareholders without a meeting), the Board may fix in advance a record date which shall be not more than sixty (60) nor less than ten (10) days before the date of the dividend payment, distribution, allotment, or other action. If a record date is so fixed, only shareholders of record at the close of business on that date shall be entitled to receive the dividend, distribution, or allotment of rights, or to exercise the other rights, as the case may be, notwithstanding any transfer of shares on the Corporation’s books after the record date, except as otherwise provided by statute. If the Board does not so fix a record date in advance, the record date shall be at the close of business on the later of (i) the day on which the Board adopts the applicable resolution or (ii) the sixtieth (60th) day before the date of the dividend payment, distribution, allotment of rights, or other action.

Section 9.2. Authorized Signatories for Checks. All checks, drafts, other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner authorized from time to tim e by resolution of the Board.

Section 9.3. Executing Corporate Contracts and Instruments. Except as otherwise provided in the articles or in these bylaws, the Board by resolution may authorize any officer, officers, agent, or agents to enter into any contract or to execute any instrument in the name of and on behalf of the Corporation. This authority may be general or it may be confined to one or more specific matters. No officer, agent, em ployee, or other person purporting to act on behalf of the Corporation will have any power or authority to bind the Corporation in any way, to pledge the Corporation’s credit, or to render the Corporation liable

for any purpose or in any amount, unless that person was acting with authority granted by the Board as provided in these bylaws, or unless an unauthorized act was later ratified by the Corporation.

Section 9.4. Certificates for Shares. A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid. All certificates shall certify the number of shares and the class or series of shares represented by the certificate. All certificates shall be signed in the name of the Corporation by (i) either the chairman of the Board, the vice chairman of the Board, the president, or any vice president, and (ii) either the chief financial officers, any assistant treasurer, the secretary, or any assistant secretary. None of the signatures on the certificate m ay be facsim ile. If any officer, transfer agent, or registrar who has signed a certificate shall have ceased to be that officer, transfer agent, or registrar before that certificate is issued, the certificate may be issued by the Corporation with the same effect as if that person were an officer, transfer agent, or registrar at the date of issue.

Section 9.5. Lost Certificates. Except as provided in this section, no new certificates for shares shall be issued to replace old certificates unless the old certificate is surrendered to the Corporation for cancellation at the same time. If share certificates or certificates for any other security have been lost, stolen, or destroyed, the Board may authorize the issuance of replacement certificates on term s an conditions as required by the Board, which may include a requirement that the owner give the Corporation a bond (or other adequate security) sufficient to indemnify the Corporation against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft, or destruction of the old certificate or the issuance of the replacement certificate.

Section 9.6. Representation of Shares of Other Corporations. The president or any other officer or officers authorized by the Board or the president are each authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by said officer.

Section 9.7. Amendment of Articles of Incorporation. Except as otherwise provided by the Articles of Incorporation or the Code, amendments to the Articles of Incorporation may be adopted if approved by the Board and by a majority of the outstanding shares entitled to vote, before or after approval by the Board. An amendment to the Articles of Incorporation shall be effective as of the date that any appropriate certificate of amendment is filed with the California Secretary of State. Section 9.8. Amendment of Bylaws. Except as otherwise provided by the Articles of Incorporation or the Code, these Bylaws may be amended or repealed, and new bylaws may be adopted, by the Board or by the Association as the holders of all of the outstanding shares entitled to vote; provided, however, that any amendment or repeal of any of these Bylaws and any new bylaws adopted by the Board must be approved by the Association.

Section 9.9. Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in sections 1 through 195 of the Code shall govern the construction of these Bylaws. W ithout limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation or other entity and a natural person.

Section 9.10. Headings; Cross-References. Captions of the articles, sections, and subsections of these Bylaws are for convenience only and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or m eaning of the provisions of these Bylaws. All cross-references in these Bylaws to articles, sections and subsections, unless specifically directed to another document, shall be deemed to refer to the articles, sections or subsections of these Bylaws.